China's stronger early-year steel output met weaker end-user demand

摘要

China's crude steel production in JanuaryFebruary rose 12.9% year on year and 16.6% from the same period in 2019, but key domestic steel consumption sectors including property, infrastructure and manufacturing all recorded weaker results than in early 2019 while faring better than early 2020. The stronger steel production coupled with weaker end-user demand has led to an oversupply in the Chinese steel market, and explains the hard squeeze on steel margins in the first two months of 2021. Chinese steel margins are likely to improve in March but within a limited range as production is expected to remain high while demand, especially for the construction steel, may improve slowly.